Existence, Uniqueness and Stability of Stationary Distributions: An Extension of the Hopenhayn-Prescott Theorem
This paper strengthens the Hopenhayn-Prescott stability theorem for monotone economies by extending it to a significantly larger class of models. We provid general conditions for existence, uniqueness and stability of stationary distributions. The conditions in our main result are both necessary and sufficient for global stability of monotone economies that satisfy a weak mixing condition introduced in the paper. Through our analysis we develop new insights on the nature and causes of stability and instability.
Stability, simulation, stationary equilibria
Research Institute for Economics and Business Administration
Rokkodai-cho, Nada-ku, Kobe
Research School of Economics, Australian National University